“I was ready to be a lawyer, but I was not ready to be a business person,” said Foley, a partner at Foley Griffin in Garden City, who co-founded his firm in 1997.
Now a seasoned business owner, Foley, also an assistant dean of the Nassau Academy of Law, has hosted two seminars at the Nassau County Bar Association on the creation of business plans for law practices. The latest, which took place March 3, covered formulating a plan and strategy for both the near- and long-term future, as well as networking and managing a practice’s finances and marketing.
“Everything is a business,” Foley said. “This one just happens to be the practice of law.”
The two Nassau Bar seminars were geared mainly toward new attorneys or those looking to leave their firm to start their own practice. Seminar attendee David Adhami, an attorney who is looking to build a practice, said he learned the importance of developing a business plan from his family’s background in retail.
“Ultimately, I want to have a successful practice,” he said.
At one time, many law firms earned much of their revenue through corporate retainers, which provided good, consistent income, said Joe Campolo, managing partner of Ronkonkoma-based Campolo, Middleton & McCormick.
In recent years, however, law firms have had to adapt to a new type of single-issue clientele as long-term contracts have declined.
“Companies got smarter,” Campolo said. “Attorneys were not doing all the work; say if they were making $5,000 a month on retainer, many law firms were only doing $2,000 worth of work.
“Now, everything is on an annual basis,” Campolo continued. “You have to recreate the business from the previous year.”
If law has become more of a business, then what goes into the business of law? Like any industry, the end goal is customer satisfaction, said Karen Tenenbaum, the founder of Tenenbaum Law in Melville, who is celebrating her 20th anniversary in private practice. She attributes much of her success to a focus on long-term goals and attention to growth planning.
“All businesses are the same,” Tenenbaum said, noting a law firm’s business plan should take the same shape as other categories of businesses, such as retailers or restaurants. Tenenbaum’s business plan involves looking at the skills and abilities of the staff she wishes to hire and maintain; short-, mid- and long-term growth plans; marketing; dealing with competition; the feasibility of expansion and other risks.
Tenenbaum has also taken a page from retail businesses by itemizing the services her firm offers and listing itemized pricing.
As in Tenenbaum’s case, a law firm’s business plan should take into account current and future staffing.
“Your staff should be representing you and your ideas,” Foley said. “You’re running a business, and your clients are your customers.”
“Every year we have to look inside ourselves. We do it in stages; we get the whole staff involved in the business planning,” Campolo said. “We have to recreate ourselves, which is no different than any other company who has to look at their price point.”
Before starting his practice, Campolo was the president of Expedite Inc., a technology company. With that experience, the first thing he did when starting his practice was create a business plan.
“I still have it to this day,” he said. “It’s written on loose-leaf paper.”
Tenenbaum said most attorneys should attend a business planning seminar or conference, or at least read up on how to develop a business plan.
“The concept is the same in every business,” she said. “If you and I went into a forest, we wouldn’t know where to go. But if someone has done it before…you have programs that show you the path through.”
After attending the Nassau Bar seminar, Adhami said he feels he can more confidently move toward opening his own practice.
“They teach us law and contracts in school, but they don’t teach us business,” he said.
While business plans can change rapidly and can require constant attention and revision, the risks of going into practice without a business plan can be severe.
“Running a practice without a plan is throwing a dart with a blindfold on – the legal market is so competitive on Long Island,” Campolo said. “The days of the Yellow Pages are over; the days of random clients are over. If you don’t have a real focused plan of attack for that year you’re going to succumb to the realities of now.”
Campolo sees the legal business heading in a direction that will focus even less on hourly rates and more on flat fees and cap fees, which will demand further reformation of practices and business plans.
“It’s going to look like a Chinese menu in the future,” he said.